Russia is drafting a bill that would allow individuals to privately mine gold, Vedomosti daily reported citing the draft of the legislation prepared by the governmental commission and will be submitted to the State Duma in the short to near term.
As covered by bne IntelliNews, following the sanctions for Russia's military invasion of Ukraine, the government had encouraged ordinary Russians to participate in the gold market. The authorities lifted the VAT on gold bars, making gold buying cheaper, and permitted the buying of gold for hard currency.
Now this could also be extended to non-industrial gold mining.
Currently, in Russia gold mining is only allowed for legal entities who have received a subsurface use licence as a result of an auction or tender. During the first three years the new law will be piloted in the Far East federal district and onshore areas of the Arctic, and later in all Russian federal regions.
In addition, the amendments to the Tax Code will exempt artisanal miners from paying personal income tax if they mine less than 1 kg of gold in a reporting tax period, the documents said as cited by Vedomosti.
The latest bill plans to set up an online system through which the residents of the Far East and Arctic regions will be able to register as self-employed entrepreneurs and receive artisanal plots for gold mining of up to 10 hectares for free use over a period of three years.
The private gold miners will only be allowed to use one plot, remove a layer of soil up to 5 metres deep and may not employ more than 10 hired workers. The maximum amount of gold mined during the lifetime of the entrepreneur on the plot may not exceed 30kg.
According to Vedomosti, there are currently 247 placer gold miners registered in Russia each producing less than 30kg a year. Their combined output is 2 tonnes per year (tpy). According to the Ministry of Finance, gold production in Russia stood at about 340 tonnes in the past three years.
The bill hopes that allowing more private miners on the market will increase the utilisation of non-industrial gold deposits, reduce illegal mining and illegal turnover of precious metals. It is also estimated to bring up to RUB30bn into regional budgets over three years and create more than 10,000 new jobs.
However, market participants told Vedomosti that the bill is too strict in imposing capacity limitations on placer miners. The miners currently working in the informal “grey” mining sector are unlikely to legalise and agree to such terms, as this would significantly reduce their profits, they believe.